Bekaert: Third quarter trading update 2018

Bekaert reported consolidated sales of € 3 227 million in the first nine months of 2018, up +5% from the same period last year . Volume growth (+3%) and the aggregate effect of passed-on wire rod price increases and price-mix (+7%) boosted an organic sales growth of +10%. Part of this growth was offset by adverse currency movements (-3.3%) and divestment effects (-1.5%). 

Third quarter organic volume growth moderated to +1.4% compared with the same quarter last year. While demand from automotive and construction markets remained strong, we saw some slowdown in industrial steel wire markets, reflecting the impact of rising trade tensions for the global economy. The aggregate effect of passed-on wire rod price increases and price-mix added +9.2% to the organic sales growth for the quarter. Currency movements (-0.6%) and divestment effects (-0.5%) were limited.

Combined sales  totaled € 3 807 million in the first nine months of 2018, up +6% from the same period last year. Organic growth was +11.6% at the combined level. Our joint ventures in Brazil reported higher sales in both domestic and export markets. The impact of divestments was -0.1% and currency effects accounted for -5.6%. The depreciation of the Brazilian real against the euro was -21.5% compared with the average rate during the first nine months of 2017.

We project continued good demand from our automotive and construction markets in the fourth quarter of 2018. We do take into account the usual seasonality effects of the end of the year and we remain cautious about any further developments in international trade policy that could impact the global economy or business conditions in our markets in particular.

From today's perspective and provided there will be no exceptional, unforeseeable circumstances, we expect underlying EBIT for the second half to be above the first half of 2018. As reported before, we are also implementing actions to reduce the net debt position by year-end.